Monday, June 22, 2015

UrtheCast to acquire Deimos Imaging for 74.2MM euros

2015-06-22 16:43 ET - News ReleaseMr. Scott Larson reports
URTHECAST TO ACQUIRE THE DEIMOS IMAGING EARTH OBSERVATION BUSINESS FROM ELECNOR, S.A.
UrtheCast
Corp.'s subsidiary has entered into a definitive agreement with Elecnor
SA to acquire Elecnor's Earth observation business, Deimos Imaging, for
an aggregate price of 74.2 million euros, subject to customary
working capital adjustments, with 69 million euros due at closing and
5.2 million euros to be paid over the next five years. To carry out the
acquisition, UrtheCast's wholly owned subsidiary, UrtheCast
International Corp., has entered into a share purchase agreement with
Elecnor and Deimos Space SLU to acquire the outstanding shares of Deimos
Imaging SLU and DOT Imaging SLU (collectively, DOT-Deimos). DOT-Deimos
owns and operates two satellites, Deimos-1 and Deimos-2. Subject to
satisfaction of certain customary closing conditions, the acquisition is
expected to close on or before Aug. 21, 2015, along with the execution
of certain ancillary agreements.

"This is an incredible
acquisition that epitomizes technological and operational synergy,"
explained Scott Larson, UrtheCast co-founder and chief executive
officer. "By adding these satellites to our suite of sensors available
via our Web platform, significantly expanding our space operations
capability -- important for our recently announced SAR and optical
constellation -- and merging our business development, UrtheCast is
rapidly accelerating its mission to democratize Earth observation
imagery, and bring a unique data set and distribution model to customers
and users that up until now, have not been available anywhere in the
marketplace."

Acquired business
The acquired business of
DOT-Deimos comprises the Earth observation satellite and imagery
business of Elecnor, a publicly traded Spanish engineering and
infrastructure company, which has been producing imagery since the
launch and commissioning of the Deimos-1 satellite in 2009. The business
consists of, among other things, the ownership and operation of the
Deimos-1 and Deimos-2 EO satellites, and the collection, storage,
processing, analysis, distribution and licensing of the Earth
observation imagery captured by these and other satellites. DOT-Deimos
has an established customer base across Europe and Latin America,
including the European Space Agency, European governmental agencies, and
commercial customers in the agricultural, forestry and land use
industries, among others. Currently, DOT-Deimos has approximately 50
employees with expertise in the Earth observation industry. Upon closing
the acquisition, UrtheCast will also own the full imagery archive
utilized by the acquired business, which currently consists of
approximately 6.5 billion square kilometres.

Fabrizio Pirondini,
Deimos co-founder and CEO, added: "This is a superb opportunity for all
involved, and opens up a world of possibilities for our respective sales
teams. The sale of Earth observation data and value-added services is
at the core of our operations, such that our synergies and objectives
for this acquisition are perfectly aligned." The Deimos-1
satellite was launched in 2009, and provides 22-metre resolution images
at 10 bits with a swath width of 650 kilometres. Deimos-1 has a
collection capacity of more than five million square kilometres per day,
with a three-day average revisit time worldwide. The Deimos-2 satellite
was launched in 2014, and provides 75-centimetre pan-sharpened images
with a swath width of 12 kilometres. Deimos-2 has a collection capacity
of more than 150,000 square kilometres per day, with a two-day average
revisit time worldwide.

The combination of UrtheCast and
DOT-Deimos is expected to allow UrtheCast to accelerate its own
strategy. UrtheCast believes this will be achieved through the use of
Deimos's imagery archive on UrtheCast's Web platform, distributing fresh
imagery through UrtheCast's established distribution channels,
customers and Web platform, leveraging each company's established
relationships and building upon each other's infrastructure.

In
addition, UrtheCast and Deimos Space have signed a mutual co-operation
agreement that will allow both companies to look for opportunities in
the market for the benefit of both companies. Deimos Space will be the
exclusive provider for receiving stations for the Deimos-1 and Deimos-2
satellites. Also, under this agreement, the companies will work together
on UrtheCast's recently announced optical and SAR (synthetic aperture
radar) satellite constellation in the areas of the headquarter mission
control centre, direct tasking and receive ground stations, mission
analysis and flight dynamics, and in the integration and testing of the
SAR payloads.
Conference call and webcast information

UrtheCast
will hold a conference call on June 22, 2015, at 4:30 p.m. Eastern
Time. To access this conference call, please dial 416-695-7806 or
888-789-9572 and use the passcode 9618732. An archive of the conference
call will be available on the company website the following day.
Advisers Raymond
James Ltd. acted as financial adviser to UrtheCast in connection with
the acquisition and has provided a fairness opinion to the board of
directors.
About UrtheCast's high-resolution camera Iris

UrtheCast's
high-resolution camera, Iris, is a multispectral imager mounted on a
biaxial pointing platform that provides a pitch/roll-pointing capability
to image points between plus or minus 52 degrees latitude. This allows
it to capture full-colour video sequences that are approximately one
metre in GSD (ground sampling distance) and approximately 60 seconds in
length through a wide range of oblique look angles. The image size for
the video is approximately 5.5 by 3.5 kilometres.
About UrtheCast's medium-resolution camera Theia UrtheCast's
medium-resolution camera, Theia, is a conventional linear
charge-coupled device push broom camera. It produces strips of
medium-resolution, four-channel multispectral imagery with a GSD of
approximately five metres and a swath width of approximately 50
kilometres. Theia's daily collection capability is approximately 29
million square kilometres.

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